Finkelman v. Nat'l Football League, 15–1435.

Citation810 F.3d 187
Decision Date14 January 2016
Docket NumberNo. 15–1435.,15–1435.
Parties Josh FINKELMAN; Ben Hoch–Parker on behalf of themselves and the Putative Class, Appellants v. NATIONAL FOOTBALL LEAGUE; NFL Ventures, L.P. ; NFL Properties, LLC; NFL Ventures, Inc. ; NFL Enterprises LLC.
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

810 F.3d 187

Josh FINKELMAN; Ben Hoch–Parker on behalf of themselves and the Putative Class, Appellants
v.
NATIONAL FOOTBALL LEAGUE; NFL Ventures, L.P. ; NFL Properties, LLC; NFL Ventures, Inc. ; NFL Enterprises LLC.

No. 15–1435.

United States Court of Appeals, Third Circuit.

Argued Oct. 8, 2015.
Opinion Filed: Jan. 14, 2016.


810 F.3d 188

Bruce H. Nagel, Esq. [ARGUED], Robert H. Solomon, Esq., Greg M. Kohn, Esq., Andrew Pepper, Esq., Nagel Rice, LLP, Roseland, NJ, Attorneys for Appellants.

Jonathan D. Pressment, Esq. [ARGUED], William Feldman, Esq., Haynes & Boone, LLP, New York, N.Y., Karen A. Confoy, Esq., Steven J. Daroci, Esq., Fox Rothschild LLP, Lawrenceville, NJ, Attorneys for Appellees.

Before: FUENTES, SMITH, and BARRY, Circuit Judges.

OPINION OF THE COURT

FUENTES, Circuit Judge:

Many of us have felt the disappointment of wanting to attend a concert or athletic event only to discover that the event has sold out. When an artist or sports team is especially popular, the gap between the supply of tickets and the demand for those tickets can be enormous. Some people will be able to attend such an event; others will not.

The Super Bowl is perhaps the ultimate example of an event where demand for tickets exceeds supply. The two named plaintiffs in this case, Josh Finkelman and Ben Hoch–Parker, wanted to attend Super Bowl XLVIII, which was held in New Jersey in 2014. Finkelman bought two tickets on the resale market, allegedly for much more than face price. Hoch–Parker—confronted with the high prices in that market—opted not to purchase any. Plaintiffs then brought a class action against the National Football League ("NFL") and various affiliated entities in the District of New Jersey, alleging that

810 F.3d 189

the NFL's ticketing practices for the Super Bowl violated New Jersey law.1 The District Court dismissed plaintiffs' suit for failure to state a claim, and plaintiffs now appeal.

We need not grapple with the meaning of New Jersey law in order to resolve this case. Our inquiry is more basic. Just as the realities of supply and demand mean that not everyone who wants to attend a popular event will be able to do so, federal courts, too, are not open to everyone who might want to litigate in them. Our courts are courts of limited subject matter jurisdiction, empowered by Article III of the Constitution to hear only "cases" and "controversies." Over time, those words have come to signify certain minimum requirements that are necessary to establish constitutional standing. These requirements are unyielding. Plaintiffs who are able to establish them will be able to sue in federal courts; others will not.

We conclude that neither Hoch–Parker nor Finkelman has constitutional standing to bring this case. Were we to decide otherwise, anyone who purchased a Super Bowl ticket on the resale market would have standing to sue in federal court based on nothing more than conjectural assertions of causation and injury. Article III requires more.

I. Background

Plaintiffs rely on a rarely litigated New Jersey statute, N.J. Stat. Ann. § 56:8–35.1 (the "Ticket Law"), which appears in New Jersey's Consumer Fraud Act. It says:

It shall be an unlawful practice for a person, who has access to tickets to an event prior to the tickets' release for sale to the general public, to withhold those tickets from sale to the general public in an amount exceeding 5% of all available seating for the event.

The Consumer Fraud Act permits private plaintiffs to sue any person who violates the Act and causes them to suffer ascertainable damages.2 Plaintiffs assert that the NFL's method of selling tickets to Super Bowl XLVIII violated the Ticket Law and resulted in unjust enrichment.

The New Jersey Legislature passed the Ticket Law in 2002 as part of an effort to reform its statutes regulating ticket resale, more commonly known as "scalping." New Jersey has regulated ticket resale since at least 1983.3 In the late 1990s, there was an effort to reexamine the effectiveness of these laws, leading to the creation of a gubernatorial Ticket Brokering Study Commission.4 Its mission was to "compare the impact of a regulated and deregulated ticket resale market on the cost and availability of tickets to New Jersey

810 F.3d 190

entertainment events" and to consider various proposed reforms.5

The Commission heard two days of testimony from a dozen witnesses before publishing its final report in October 2001. It found that, "[i]n a typical year, 90% to 95% of events in New Jersey do not sell out," but getting tickets to the "premium events" that do sell out "is not easy."6 The Commission focused heavily on "hold-backs" of tickets by event organizers, concluding that "[h]old-backs disproportionately affect the general public's opportunity to obtain tickets in favor of privileged insiders," and that the practice should be "eliminated or limited by statute or regulation."7 The Commission therefore recommended new legislation to "[l]imit the number of tickets which can be held back from sale to the general public to 5 percent of the available seating in any venue or performance."8 The Legislature took up the Commission's suggestion, and Governor Whitman signed the bill enacting the Ticket Law on January 8, 2002.9

Since the Ticket Law's passage, very few courts have grappled with its meaning. Indeed, the parties point to only one case in which a New Jersey state court has interpreted the Law.10

A. Factual Allegations

Super Bowl XLVIII took place at MetLife Stadium in East Rutherford, New Jersey on February 2, 2014.11 Plaintiffs allege that the NFL distributed 99% of Super Bowl tickets to NFL teams and League insiders.12 Of that amount, 75% of tickets allegedly went to teams, with 5% going to the host team, 17.5% going to each team playing in the Super Bowl, and 35% going to the remaining teams in the League. The remaining 25% of tickets are said to have been distributed to "companies, broadcast networks, media sponsors, the host committee and other league insiders."13 Only about 1% of Super Bowl tickets were available for purchase by members of the general public, and the only way for someone to obtain one of those tickets was to participate in a League-sponsored lottery.14 In order to acquire a ticket in the lottery, a person had to (i) enter by the deadline, (ii) be selected as a winner, and (iii) choose to actually purchase a ticket.15

Neither Hoch–Parker nor Finkelman entered the NFL's ticket lottery. Instead, on December 30, 2013, Finkelman purchased two tickets to the Super Bowl in the resale market at a price of $2,000 per ticket (which he alleges was well in excess of the tickets' $800 face price).16 Hoch–

810 F.3d 191

Parker wanted to purchase five Super Bowl tickets for himself and his family, hoping to pay no more than $1,000 per ticket.17 He decided not to purchase any when, after researching the availability of tickets between November and December of 2013, the only tickets he could find were for $4,200 (or more).18

B. Procedural History in the District Court

Finkelman filed a putative class action against the NFL in January 2014 in the District of New Jersey. One month later, he filed an amended complaint that added several defendants and identified Hoch–Parker as a second named plaintiff.

The District Court granted the NFL's motion to dismiss the complaint—with prejudice—on January 20, 2015, in an oral decision read into the record.19 Four aspects of its decision merit further discussion here.

First, the District Court concluded that plaintiffs failed to plead a viable claim under the Ticket Law. It reasoned that the NFL did not "withhold" any tickets to the Super Bowl within the meaning of the Law, but rather "distributed or allocated [all tickets] according to [its] existing system."20 It also determined that the Ticket Law's 5% limitation on withholding tickets "applies solely to tickets that are intended for release to the general public."21 At most, that portion was the 1% of tickets sold through the NFL's lottery—and none of those tickets were withheld.22 Consequently, the District Court decided that the NFL's ticketing practices did not run afoul of the Ticket Law.

Second, the District Court concluded that Finkelman failed to plead causation under the New Jersey Consumer Fraud Act. It reasoned that Finkelman's decision not to enter the NFL's ticket lottery precluded him from proving causation because he could not demonstrate that he suffered any injury resulting from the NFL's alleged misconduct.23 The District Court stated that it would be "unreasonable" for Finkelman to recover under the Act because he "failed to avail himself of the very mechanism ... whereby his harm would have been avoided"—i.e., entering the lottery and possibly winning a face-price ticket.24 The District Court viewed the causation issue as a fatal pleading defect under the state statute, although it noted that Finkelman's failure to enter the NFL ticket lottery raised "clear standing issues" under Article III.25

...

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